The Alberta government has introduced an overhaul of pension legislation, which it says will harmonize pension rules between Alberta and British Columbia, and should make it easier for financial firms to develop pension plans.
The proposed act, which represents the first major rewrite of private sector pension laws in 25 years, makes it easier for private sector employers to have affordable, workable pension plans, the government says, by providing more flexibility in how they design plans and removing barriers to employer pensions. Currently, only one in six employees in Alberta’s private sector belongs to a pension plan, it says.
Among other things, the new legislation would harmonize pension rules between Alberta and B.C., making it easier for pension plans to both start up and operate effectively for their members. It would also extend the timelines for dealing with funding shortfalls; provide more clarity around the responsibilities of those involved in managing pension plans; enhance disclosure; and, establish standards for two new types of plans, target benefit plans, and jointly sponsored plans. Rules around vesting requirements and locking in would be changed, too.
“The private sector has been asking for solutions that help them deal with some of the challenges associated with an employer’s ability to offer pension plans,” said president of Alberta’s treasury board and minister of finance, Doug Horner. “At the end of the day, we’ve been striving for more options to help Albertans be better prepared for a financially secure retirement, and this legislation is another step in that direction.”
“Sun Life Financial welcomes the introduction of this legislation,” said, Randy Colwell, regional vice president for Sun Life’s workplace retirement business in Western Canada. “We work with hundreds of thousands of Alberta employees who contribute every pay period to workplace retirement savings plans to save for their retirement. The new legislation will make it easier for employers to establish pension plans, providing more Albertans with access to a convenient way to save at work.”